Responsible Investment News

Investing to influence climate change

In the financial services industry, this led to funds with a sustainable focus for ethically-minded investors to direct their savings to, particularly in the case of compulsory superannuation.

There are also managed funds and exchanged traded funds (ETFs) with an environmental, social and governance (ESG) focus, but collectively these still only make up a fraction of the overall market.

BlackRock, in what seemed to reflect a visit from the three ghosts of Christmas over the holidays, recently changed their direction announcing they would completely divest from coal this year.

This was a significant move from one of the largest funds globally and they would additionally incorporate other ESG initiatives.

In two open letters – one for the chief executives of the companies they invest in and the other to their own clients – BlackRock chief executive officer (CEO), Larry Fink, said climate change had become a defining factor in companies’ long-term prospects.

“Last September, when millions of people took to the streets to demand action on climate change, many of them emphasised the significant and lasting impact that it will have on economic growth and prosperity – a risk that markets to date have been slower to reflect,” Fink said.

“But awareness is rapidly changing, and I believe we are on the edge of a fundamental reshaping of finance.”